Student Loans Caught in Capitol Crossfire

WASHINGTON—Congressional efforts to revamp how borrowing costs are set for millions of college students are being thwarted by the broader partisan fight over taxes and deficit reduction.

The White House said it hopes Congress will reach a deal later this month to reverse a July 1 increase in the interest rate on some new federal student loans. The rise to 6.8% from 3.4% will affect an estimated seven million students who take out...